Central Government’s Tax Revenue increased by over 50 times in the last 30 years
Sai Krishna Muthyanolla
September 19, 2017
Government of India’s tax revenue increased by more than 50 times between 1985-86 and 2016-17. From Rs 211.4 billion in tax revenue in 1985-86, the tax collection touched Rs 10888 billion in 2016-17.
The Reserve Bank of India (RBI) recently released the hand book of statistics on Indian Economy for 2016-17. As per the statistics, the Central Government’s tax revenue increased by over 50 times in a span of 30 years between 1985-86 and 2016-17. From Rs 211.4 billion in 1985-86, the tax revenue increased to Rs 10887.9 billion in 2016-17. During the same period, the non-tax revenue also increased by more than 48 times.
Tax Revenue touched One lakh crore in 1998-99
Total tax revenue of the Government of India includes both direct & indirect taxes. Direct taxes include personal income tax and corporation tax while indirect taxes comprise of Excise & Customs duties. During the 30-year period from 1985-86 to 2016-17, the tax revenue decreased compared to the previous year (negative growth) on two difference occasions, in 1993-94 and 2001-02. Greatest increase in the tax revenue was seen in 2006-07 when the tax revenue increased by close to 30%. The tax revenue increased by more than 20% only in nine (9) of the thirty years. In thirteen (12) of these years, it grew between 10% and 20%. The growth was less than 5% on four occasions.
The tax revenue crossed Rs 50000 crore in 1991-92 and one lakh crore in 1998-99. The tax revenue crossed 5 lakh crore in 2010-11 and 10 lakh crore in 2016-17.
Indirect Tax revenue was more than 4 times the Direct Tax revenue in 1985-86
In 1985-86, the indirect tax revenue was Rs 174 billion, more than 4 times that of the direct tax revenue of a mere Rs 37 billion. The share of indirect taxes in the total tax revenue was 83% compared to the 17% share of direct taxes in 1985-86. In a span of 30 years, the share of both has more or less become equal. In 2016-17, share of direct taxes was 48% in the total tax revenue compared to the 52% share of indirect taxes. The share of direct taxes in the total tax revenue crossed 30% for the first time in 1998-99 and crossed 40% for the first time in 2003-04. In fact, in the 8 years between 2007-08 and 2014-15, the share of direct taxes in the total tax revenue was more than the share of indirect taxes. In 2009-10, the share of direct taxes was close to 60%, the highest ever till date.  Starting again in 2015-16, the share of indirect taxes has overtaken the share of direct taxes.
Personal Income Tax collection crossed 1 lakh crore in 2010-11
In 1985-86, corporation tax accounted for more than 3/4th of the total direct tax revenue. It remained more or less the same till 1999-00. Starting 2000-01, the share of income tax in total direct tax collection has significantly increased. Since 2000-01, the share of income tax in the total direct tax collection has been more than 35% except in 2010-11. Personal Income tax collection crossed one lakh crore for the first time in 2010-11 while corporation tax crossed one lakh crore in 2006-07.
Featured Image: Central Government’s Tax Revenue